Stanfield v. Osborne Industries, Inc.

52 F.3d 867 (10th Cir. 1995)

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Nature of the Case

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Facts

P developed a fiberglass heating pad for newborn hogs. He presented these ideas in a letter to the president of First State Bank in Osborne, Kansas. Osborne community leaders subsequently created D to manufacture P's products. Thibault moved to Osborne to become president of D. P agreed to allow D to manufacture the products he had developed in exchange for royalties on sales. P became an employee of D. P learned of D's plan to develop a trademark, he insisted that D use the word 'Stanfield' in its mark. D agreed and they entered into a written agreement. Two trademarks were designed. One mark consisted of the word 'Stanfield'; the other mark was a circle design incorporating the word 'Stanfield.' D used both trademarks. D applied for registration of these trademarks in March 1977. They were registered on January 24, 1978. P had become ill and resigned on September 23, 1975. The Patent and Trademark Office rejected P’s application for a patent on the hog heating pad. D stopped paying royalties to P on the sale of heating pads in December 1976. P sued D claiming that D had breached the 1973 agreement by discontinuing the payment of royalties. P alleged that D's use of the word 'Stanfield' was conditioned upon the payment of royalties. The Kansas Supreme Court ultimately overturned a verdict in favor of P. D informed P that D considered the July 1975 agreement a release of plaintiff's rights in the word 'Stanfield,' and that D had registered its 'Stanfield' trademark. D used its trademarks in commerce since 1976. In 1983, D filed declarations with the Patent and Trademark Office to obtain incontestability status. In September 1991, P requested that D discontinue use of the Stanfield trademark because the 15-year license agreement had expired. D refused and P sued claiming that D fraudulently procured the registration of the trademark. D was granted summary judgment and P appealed.